NBA, NBPA Reach Agreements On Disability Insurance, Salary Withholding

The NBA and NBPA have reached an agreement on a revamped insurance benefit for players who suffer career-ending injuries, sources tell Adrian Wojnarowski of ESPN. According to Wojnarowski, the new disability policy will pay players $2.5MM in the event of a career-ending injury sustained on or off the court.

The previous insurance policy for career-ending injuries paid out approximately $312K — the NBPA had been pushing to increase that amount in the midst of future salary cap uncertainty and the coronavirus pandemic, writes Wojnarowski. The new policy will also apply to career-ending ailments related to COVID-19 complications, Woj adds.

Sources tell ESPN that the new insurance benefit will apply to all active players up to 35 years old and would be paid out in addition to the money owed on the player’s existing contract. As ESPN’s Bobby Marks points out (via Twitter), NBA clubs already have a disability policy in place for their top earners who suffer major injuries, but that policy is designed to protect the teams rather than the players.

Meanwhile, the NBA and the players’ union have also reached an agreement to continue withholding 25% of players’ pay checks in escrow, Wojnarowski reports. That deal has been in place since May 15 and is designed to help maintain a balance of the season’s basketball-related income between teams and players.

The NBA’s Collective Bargaining Agreement calls for approximately a 50/50 revenue split between teams and players. With a portion of the season’s games canceled and the NBA preparing to bring in less revenue than initially anticipated, withholding a portion of player pay checks allows the two sides to begin balancing the books.

According to Marks (via Twitter), there’s already about $600MM sitting in a pair of escrow accounts that has been withheld from players by the NBA and its teams. Once the end-of-season accounting is completed, the NBA will be able to determine if players received more than 51% of this season’s BRI. If that’s the case, the money in escrow will be returned to the teams rather than the players.